Let’s discuss business gifts. The IRS will only allow a business to deduct $25 per year given to any one person or ’donee’ for business gifts. If you give your clients $50 gift cards each year or a $100 bottle of wine only $25 is deductible by your business. This is also true for salesmen or any other employee who has unreimbursed business expenses that are deducted as miscellaneous itemized deductions. If you are giving away concert or sports tickets to clients and you join them at the event, this isn’t a gift, it has to be considered an entertainment expense, which is 50% deductible, which in most cases is better than $25. If you don’t go to the event with the client, you have the choice of taking the deduction as a business gift or entertainment expense.
See this article below that does a pretty good job of spelling out the gift vs entertainment vs employee gift (wages) breakdown:
http://www.toolkit.com/small_business_guide/sbg.aspx?nid=P07_2640
In any case, if you have questions about this, it is best to talk to me about it so we can plan ahead before you actually make the gift so we can get you the maximum deduction for your business.